How a government shutdown could affect you

Monday

Sep 30, 2013 at 2:25 PMOct 1, 2013 at 11:43 AM

By Melissa EricksonMore Content Now

How would the current government shutdown affect average Americans?

“The answer is that unless you’re taking a vacation to a national park or Washington, D.C., or visiting the national museums in the next few days, you’re probably not going to notice it,” said Emory University political scientist and poli-sci professor Alan Abramowitz. “Some services will be affected, but mostly we’ll feel it indirectly or not until later.”

Think of the shutdown like water starting to freeze. The effects will spread the longer the shutdown stays in place.

Mary Noble, senior editor of Politix.Topix.com, said, “The first people to notice the shutdown will be the 800,000 federal employees who will be sent home when the shutdown begins. Their pay will stop immediately – which they will certainly notice.”

No effect on ACA

When the 2013 fiscal year ended Tuesday at midnight, a partial government shutdown occurred. Essential government services will continue, but many federal programs and activities stopped Tuesday and will not restart until a new deal is in place.

While the timing coincides with the launch of marketplaces and enrollment for the Affordable Care Act, or “Obamacare,” that won’t be affected.

“Most of Obamacare, including the government-run insurance exchanges, has a guaranteed revenue stream,” Noble said. The state-run exchanges for the uninsured opened as scheduled Tuesday.

Shutdowns are expensive

As the economy shows signs of recovery, the shutdown surely comes at a bad time. The two previous shutdowns, in late 1995 and early 1996, cost the country $1.4 billion, according to the Congressional Research Service.

Even a brief shutdown of two or three days would negatively affect our economic growth, Abramowitz said.

“When you’re laying off hundreds of thousands of people and reducing the government payroll by that much, there will be a negative impact on economic growth and jobs,” he said.

A shutdown of a month could push the country back into recession.

“All Americans will be affected by the pay stoppage for 800,000 federal workers. It’s basically the same as if 800,000 people lost their jobs in a single month. It will certainly slow economic growth,” Noble said.

Closed for business

Many, if not most, government offices are closed for business. About 40 percent of the nation’s 2 million federal workers will be furloughed. Vacationers won’t be able to visit a national park or the Smithsonian, tour Alcatraz or get a passport. Foreign visitors will not be able to obtain a visa. Federal regulatory agencies, such as IRS call centers and offices that handle federal grants and contracts, will close. The Centers for Disease Control and Prevention will likely close its doors as flu season begins.

There are notable exceptions: You’ll still get your mail because the Post Office is run as an independent corporation. Social Security and Medicare will continue to arrive because those programs don’t require annual appropriations. Public safety workers from meat inspectors to air traffic controllers, the military and federal prison guards will stay on the job. The courts can stay open, too, using money collected through fees and fines.

Effects over time

While at first many people won’t notice much change, the effects will trickle down as the number of federal employees still at work won’t be able to handle the workload. For instance, the IRS employs 94,516 people. Of that only 9.3 percent are exempted from furlough, leaving 8,752 at their desks.

Government business will take longer. For instance, veterans appealing the denial of disability benefits will have to wait longer for a decision because the Board of Veterans Appeals would not issue any decisions during a shutdown.

Need a loan?

The shutdown will hurt the housing market, which is driving economic recovery. People hoping for federal home loans will have to wait, as will those applying for small business loans from the government.

Veterans will feel it

“Military service members may stop getting paid if the shutdown lasts longer than a week, because there’ll be no one to process their paychecks,” Noble said. “The Veterans Affairs Department will run out of money to pay disability and survivors’ compensation and pensions to over 3.5 million low-income veterans.”

Bad for all of us

What’s bad for the economy is bad for America, the experts agreed. The shutdown “is just a clear sign — another sign — that our system of government is rather dysfunctional right now,” Abramowitz said.

What about the debt ceiling?

A failure to raise the debt limit could have very serious economic consequences, said Emory University political scientist and poli-sci professor Alan Abramowitz.

“More ominously, GOP leaders in the House of Representatives, responding to growing pressure from conservatives within their own caucus, are now threatening to refuse to agree to an increase in the debt ceiling, which will be necessary before the end of October for the government to continue paying its bills,” said Abramowitz, a national political expert. “This could lead to the first-ever default by the United States on its debt with potentially far-reaching economic consequences.”

He says the push by some Republicans in the House of Representatives to defund the Affordable Care Act is part of a range of actions designed to please the Republican base, but it may dim their appeal in next year’s midterm elections, when control of both the House and Senate are up for grabs.

“Polls show that most voters would probably blame the GOP more than congressional Democrats or the White House in the event of a government shutdown, as they did the last time such a confrontation occurred under President Bill Clinton in the 1990s,” Abramowitz says.

“And if Republicans are seen as responsible for a default on the debt, that could be even more damaging to the party,” he adds. “It’s a high-stakes game of chicken, and Americans will be watching over the next few weeks to see which side blinks first.”